If you are investing for the first time, it means that you have realised that only saving money is not enough. However, you can get easily confused due to the plethora of investment options in the market. By studying each of these investments carefully, you can find out the ones that suit your investment needs. Here are some important tips to first time investors:
Portfolio diversification
According to investment experts, portfolio diversification is a must to balance the risk associated with market-linked investments. This means that you should have a balance of fixed income investments like fixed deposits and market linked instruments like stocks and mutual funds in your portfolio. There is a saying that you should not put all your eggs in one basket. This means portfolio diversification is a must.
Portfolio diversification is not just confined to investing in different instruments but it is also about considering their flaws and benefits before investing. You will also find many investment options in the same category. For example, while investing in the stock market, an investor buys stocks of multiple companies in the hope that some of the stocks will perform better and cover the losses that the other stocks might cause. The same principle can be applied while diversifying portfolio.
Ladder FDs
If you are planning to invest in fixed deposits choose a different tenor for each deposit. This is called laddering deposits that makes your investment more liquid and also gives you a chance of reinvesting returns at a higher rate when the FD interest rate increases.
Bajaj Finance FD is offering high interest rates of up to 7.05%. Along with the highest FD rates, you also get the option of investing in multiple FDs with a single cheque. The tenor for each deposit along with the amount and FD type can vary as per your financial requirements. Laddering FDs becomes much easier due to this facility.
Go for reliable options
You should only rely on the instruments offered by reliable companies and banks. Checking the credit ratings is an important barometer when it comes to validating the trustworthiness of a financial institution. Similarly, some investments are riskier than others.
For example, equities, mutual funds, and other money market instruments promise substantial returns. However we often overlook the T&Cs written in smaller fonts that read that investing in them is subject to market risk. Therefore, if you are a beginner and a risk-averse investor, go for stable investments like fixed deposits, post office savings schemes, PPF, NSC, etc.
Bajaj Finance FD is a corporate FD that has received the highest credit ratings from CRISIL and ICRA for being a stable instrument. Apart from the high credit ratings, investing in fixed deposits is inherently safe as the FD rates don’t fluctuate as per market condition. Therefore, investing in such instruments will ensure that your savings won’t get wiped out during turbulent times.
Calculate the returns to plan your finances
Investing money in stable instruments is also not enough in the longer run. You will also need to chalk-out a smart investment strategy after calculating the expected returns of every instrument you invest in. For instance, if you invest in FDs, use an FD calculator to check the maturity amount of your investment. After knowing the returns, you can decide to ladder the deposits or go for a cumulative FD for achieving your long term financial goals.
Bajaj Finance FD calculator gives accurate details of the interest gains and maturity amount. If you choose to invest in non-cumulative FDs, it will show the generated interest payouts along with the payout options. With Bajaj Finance FD, you get the option of choosing from monthly, quarterly, yearly, or bi-annual interest payouts. These payouts prove to be useful if you need a regular income from your investments.
